Businesses in South Suffering

Sales drop by 50% in most areas; clothing, appliances hardest hit.

As southern towns contend with a barrage of rocket fire, business in the region has dropped off by 50% during the past few days.The worst hit stores are fashion and electrical appliance chains, coffee shops and fast food outlets, but even supermarkets and pharmacies have seen sales plummet.

A large part of the problem for the stores is finding employees who are willing to come in to work since the most recent round of escalation began in Israel's south. "Store managers are under pressure and want to close the stores since employees do not want to come in. We are trying to convince them not [to close] and are explaining to them that the [shopping] center must stay open for the benefit of the customers," said Hai Galis, vice president of the Big shopping mall chain. "But at the same time, we are leaving it to the [managers'] judgment, and all the stores have remained open over the past few days," he said.

Iron Dome - Ilan Asayag - 12032012
Ilan Asayag

But even though residents in the south are staying home, they are not taking advantage of fast food and restaurant deliveries. Such orders are down 40% in the last few days.

"People are coming, parking their cars as close as possible to the store and are buying functional things such as food or drugstore items, or other essentials for the home," said Galis.

Other shopping centers in Be'er Sheva and near Kiryat Malakhi reported an even larger drop in sales, over 50% - which is particularly problematic since most stores expected a big surge in sales in advance of the Passover holiday in just under a month. Many stores are just now launching their Passover sales, and they have been hit hard. The few electronic items that are moving are small televisions and DVD players. Many clothing stores have simply closed their doors entirely.

Will you get paid?

As to whether employees who stay home will get paid, the Histadrut labor federation will ask the Finance Ministry on Monday to reach an agreement to compensate such workers. In the past - such as during the Second Lebanon War in 2006, and Operation Cast Lead in Gaza in 2009 - the treasury and Histadrut reached an agreement whereby the state compensated employers for some of their costs associated with paying workers who stayed home.

Histadrut chairman Ofer Eini also wants a similar agreement with employers organizations in the private sector. In a similar round of rocket attacks last November, the Histadrut reached a deal with most large employers in the region not to dock employee pay during such times, and the Histadrut expects a similar deal soon. "The employers understand that tens of thousands of workers stayed home not out of choice, but so as not to endanger their lives, and to stay with their children who were forced to stay home from school," said Meir Babayoff, the head of the Negev region of the Histadrut.

There is no clear law on the matter of paying workers who stayed home under such circumstances, as neither the Israel Defense Forces nor the government have officially declared an emergency situation or war. But employers are also entitled to send their workers home and close down - and to call it vacation at the expense of employees' vacation days. Employers can also cut back on workers' hours in such cases.

But employers cannot fire workers who stayed home to take care of their kids because school or daycare was canceled.

"There is a serious problem finding workers since they simply do not want to come to work, mostly parents of children who do not have school," said a senior chain store executive. "Somehow we have to get by with less personnel in the stores," he said.

Airlines expecting cancelations

Airline managers are worried that Passover tourism to Israel will be affected by the latest round of escalation near Gaza.

Both Israeli and foreign airline executives called the situation worrying and say they expect a wave of cancelations.

"The situation is very serious since we are ahead of the peak of tourist travel to Israel for Passover, which is supposed to start at the end of the month," said one senior industry executive.

"This mostly concerns groups. In case of an escalation, tour operators will have no problem canceling," said the executive.